2023 Market Outlook: A Tale of Two Economies | ETF Trends

The key question of 2023 — will there be a hard or soft-landing — depends very much on which economy one is looking at: the goods economy or the service economy. Will falling goods prices and ample manufacturing capacity “defeat” low unemployment and sticky wage inflation?

In the upcoming webcast, 2023 Market Outlook: A Tale of Two Economies, Simeon Hyman, global investment strategist, and head of investment strategy at ProShares; Kieran Kirwan, director of investment strategy at ProShares; and Troy Goldstein, executive director of distribution at ProShares, will provide expert insight into today’s markets and potential investment opportunities for 2023.

While the markets have been weighed down by uncertainty, investors have found some stability in dividend-themed exchange traded funds, such as the ProShares S&P 500 Aristocrats ETF (NOBL), which only targets S&P 500 companies that have increased their dividends for at least 25 consecutive years.

ProShares also offers dividend growth ETFs that focus on other market segments, like the ProShares Russell 2000 Dividend Growers ETF (SMDV) and the ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) for those seeking quality dividend growers in the small- and mid-cap categories, respectively. The mid-cap Dividend Aristocrats Index only requires 15 consecutive years of increased dividends for inclusion. SMDV, a dividend spin on the Russell 2000, the benchmark U.S. small-cap index, tracks the Russell 2000 Dividend Growth Index, which includes small-cap firms with dividend increase streaks of at least a decade.

With the Federal Reserve still adamant about wrestling down elevated inflationary pressures, investors may look to something like the ProShares Equities for Rising Rates ETF (NasdaqGM: EQRR), the first U.S. stock ETF designed to outperform traditional large-cap indices, like the S&P 500, when interest rates rise. EQRR tries to reflect the performance of the Nasdaq U.S. Large-Cap Equities for Rising Rates Index, which selects 50 components from a universe of the 500 largest companies based on market capitalization listed on the U.S. exchange that have historically outperformed during periods of rising interest rates. The sector with the highest correlation will have a 30% position in the index, followed by 25% for the second highest, 20% for the third highest, 15% for the fourth highest, and 10% for the fifth highest.

Supply-side snares may continue, and investors could capitalize on fundamental changes to the supply chain through a related ETF, the ProShares Supply Chain Logistics ETF (SUPL). SUPL is designed to give investors access to companies involved in each point of the process that moves raw materials and goods around the world. The ETF focuses exclusively on companies transforming how raw materials and goods move around the world — including global shipping, railroad, air, and trucking companies that collectively touch every point of the supply chain, according to a statement from the firm.

Financial advisors who are interested in learning more about investment strategies for 2023 can register for the Thursday, January 19 webcast here.